Note: Financial references in US dollars unless otherwise
indicated.
Q2 2020 HIGHLIGHTS
- Adjusted EBITDA of $84 million
and Adjusted earnings of $0.38 per
diluted share
- Reduced North American unit manufacturing costs by 9%
quarter-over-quarter and 7% year-over-year
- Extended maturity of committed revolving bank lines to
May 2022 and increased aggregate
commitment from $245 million to
$300 million
- Liquidity of $378 million at
quarter-end
- Declared quarterly variable dividend of C $0.30 per share for shareholders of record on
September 1, 2020
- Resuming limited production at Line 1 of Cordele, Georgia OSB mill to respond to
stronger than expected demand
TORONTO, Aug. 5, 2020 /CNW/ - Norbord Inc. (TSX: OSB)
(NYSE: OSB) today reported Adjusted EBITDA of $84 million for the second quarter of 2020
compared to $75 million in the first
quarter of 2020 and $36 million in
the second quarter of 2019. The quarter-over-quarter increase was
primarily due to lower manufacturing costs, partially offset by
lower shipment volumes, while the year-over-year increase was
primarily due to higher realized North American oriented strand
board (OSB) prices, as well as lower manufacturing costs, partially
offset by lower shipment volumes. North American operations
generated Adjusted EBITDA of $84
million compared to $68
million in the first quarter of 2020 and $18 million in the second quarter of 2019, and
European operations delivered Adjusted EBITDA of $2 million compared to $10
million in the prior quarter and $21
million in the same quarter last year.
"The second quarter of 2020 started slowly as it overlapped with
the significant pullback in economic activity that occurred during
the early stages of the COVID-19 pandemic. However, we ultimately
saw improving demand through the quarter that led to better than
expected results. Our Adjusted EBITDA represented our best
performance in seven quarters, more than doubling from year-ago
levels and improving 12% from the prior quarter," said Peter
Wijnbergen, Norbord's President & CEO. "Further, I am
particularly pleased with our company's ability to drive down costs
while continuing to work safely within the strict protocols
required by the pandemic."
"Subsequent to the strong finish to the second quarter, customer
demand has continued to increase well ahead of expectations,
despite ongoing concern about the impact of COVID-19 on the broader
economy. At Norbord, we have always been committed to producing
what we can sell and what our customers need. A limited restart of
Cordele Line 1 is the only option
available to us to provide additional volume to our customers in
the near term. Though these recent developments give us reason for
optimism, it is unclear whether the worst of the pandemic is behind
us, therefore we will maintain our approach of planning for the
worst but being prepared for better. We will remain vigilant and
will continue to focus on the health and safety of our employees as
well as managing the business to be resilient and flexible."
Norbord recorded Adjusted earnings of $31
million or $0.38 per share
(basic and diluted) versus Adjusted earnings of $21 million or $0.26 per share (basic and diluted) in the first
quarter of 2020 and an Adjusted loss of $8
million or $0.10 per share
(basic and diluted) in the second quarter of 2019. Earnings in the
current quarter include a $16 million
non-cash impairment loss related to idle production assets at the
Grande Prairie, Alberta mill.
Adjusted earnings (loss) exclude non-recurring or other items and
use a normalized income tax rate:
$
millions
|
Q2
2020
|
Q1 2020
|
Q2 2019
|
6 mos
2020
|
6 mos 2019
|
Earnings
(loss)
|
18
|
20
|
(14)
|
38
|
(13)
|
Adjusted
for:
|
|
|
|
|
|
Impairment of
assets
|
16
|
-
|
-
|
16
|
-
|
Loss on
disposal of assets
|
3
|
-
|
1
|
3
|
1
|
Stock-based
compensation and related costs
|
2
|
-
|
1
|
2
|
2
|
Costs on early
extinguishment of 2020 Notes
|
-
|
-
|
10
|
-
|
10
|
Costs related
to 100 Mile House indefinite curtailment
|
-
|
-
|
2
|
-
|
2
|
Reported
income tax expense (recovery)
|
3
|
8
|
(10)
|
11
|
(15)
|
Adjusted pre-tax
earnings (loss)
|
42
|
28
|
(10)
|
70
|
(13)
|
Income tax
(expense) recovery at statutory rate(1)
|
(11)
|
(7)
|
2
|
(18)
|
3
|
Adjusted earnings
(loss)(2)
|
31
|
21
|
(8)
|
52
|
(10)
|
(1)
|
Represents Canadian
combined federal and provincial statutory rate
|
(2)
|
Non-IFRS
measure
|
COVID-19 Update
During the first quarter, in response to the significant market
uncertainty from the COVID-19 pandemic, Norbord adjusted its
operating configuration by employing a flexible operating strategy
to match production with reduced customer demand. After initially
reducing operating mill capacity by approximately 35% for the month
of April, market demand improved sufficiently in the second quarter
to allow Norbord to substantially resume production across its
North American and European mills. (See the Performance section
below for details of Norbord's second quarter capacity
utilization.)
Responding to Stronger Than Expected Rebound in North
American OSB Demand
Subsequent to quarter-end, the rebound in North American OSB
demand has accelerated, and in response, Norbord will resume
production in August on a limited operating schedule on Line 1 of
its two-line Cordele, Georgia OSB
mill. The line was indefinitely curtailed in November 2019 due to poor market conditions and
lower-than-anticipated OSB demand and had previously been running
on a reduced operating schedule from September to November 2019.
Given the uncertainty around the depth and duration of the
economic impact of COVID-19 combined with the inherent seasonality
of OSB demand, going forward the Company will incorporate
Cordele Line 1 into the flexible
operating strategy employed since the early stages of the pandemic.
The objective of this new operating strategy is to create the
flexibility to adjust production up and down to better align with
demand. The customer demand situation remains fluid, and the
Company's ability to continue to operate any of its mills could be
influenced by factors outside Norbord's control, therefore
additional operating adjustments or curtailment may be necessary.
Norbord does not intend to provide interim operational updates
unless there is a significant change in the Company's flexible
operating strategy.
The Cordele, Georgia mill has
two production lines and a total stated annual production capacity
of 1,040 million square feet (MMsf) (3/8-inch basis), of which 440
MMsf (3/8-inch basis) is attributed to Line 1. Cordele Line 2 has continued to operate during
the indefinite curtailment of Line 1. Norbord is hiring
approximately 25 employees at the mill in connection with the
limited restart of Line 1.
Liquidity and Capital Allocation
The robust cash flow generated during the quarter allowed
Norbord to fully pay down its credit facility drawings, ending the
quarter with strong liquidity of $378
million, which includes the previously announced
$55 million increase in the revolving
bank lines aggregate commitment. The Company believes its available
liquidity is sufficient to fund expected short-term cash
requirements and has comfortable headroom against the financial
covenants governing access to its committed credit facilities. Core
long-term bond debt totals $665
million, with no maturities until 2023.
Norbord continues to defer a number of non-critical capital
projects in response to COVID-19 uncertainty and previously reduced
its 2020 capital expenditures budget from $100 million to $75
million. The minimum annual investment required to maintain
the Company's existing assets is approximately $35 million.
To prioritize preserving financial flexibility, Norbord did not
repurchase any shares under its Normal Course Issuer Bid (NCIB)
during the second quarter. To-date, Norbord has repurchased a total
of 1.2 million shares under its current NCIB at a cost of
$27 million.
Market Conditions
In North America, US new home
construction activity, the single largest driver of OSB demand,
pulled back in the month of April in response to the economic
impact of COVID-19. The seasonally adjusted annualized rate of US
housing starts was 934,000 units in April, but improved to 1.19
million in June, only slightly behind the 1.24 million pace in
June 2019. The pace of single-family
starts, which use approximately three times more OSB than
multifamily starts, improved similarly. The pace of permits (the
more forward-looking indicator) was 1.07 million units in April,
but improved to 1.24 million in June, almost in line with the 1.27
million pace in June 2019. The 2020
consensus forecast from US housing economists is approximately 1.21
million starts, or about 6% below 2019 levels, but forecasts have
been increasing in response to the stronger than expected rebound
in homebuilding activity following the initial COVID-19 impact.
Throughout the ongoing pandemic, demand from the
repair-and-remodeling sector has strengthened and has provided a
partial offset to the lower homebuilding activity in April.
Reflecting the uneven pace of demand throughout the quarter,
North American benchmark OSB prices decreased in April before
increasing in May and June. Average benchmark prices were largely
in line with the prior quarter and reflected regional differences
in the impact of COVID-19 but were significantly higher than the
same quarter last year. The table below summarizes average
benchmark prices ($ per Msf, 7/16-inch basis) by region for the
relevant periods:
North American
region
|
% of Norbord's
operating capacity
|
Q2
2020
|
Q1 2020
|
Q2 2019
|
North
Central
|
15%
|
270
|
271
|
188
|
South East
|
36%
|
262
|
251
|
186
|
Western
Canada
|
29%
|
224
|
255
|
153
|
In Europe, UK panel demand
pulled back significantly in the first half of the quarter as
government directives required many of the Company's UK customers
to close operations in late March. As restrictions in the UK eased
and many of the Company's UK customers restarted operations, panel
demand gradually recovered in the back half of the quarter.
Continental demand, particularly in Germany, remained resilient throughout the
quarter. In local currency terms, average panel prices were down 3%
quarter-over-quarter and 16% year-over-year.
Performance
In North America, second
quarter shipments were down 4% quarter-over-quarter and 12%
year-over-year. Excluding the Chambord,
Quebec mill, Norbord's North American mills produced at 74%
of available capacity in the second quarter of 2020 compared to 79%
in the first quarter and 88% in the second quarter of 2019.
Norbord's second quarter North American OSB cash production costs
per unit (excluding mill profit share and freight costs) decreased
by 9% compared to the prior quarter and 7% compared to the same
quarter last year.
In Europe, second quarter
shipments were down 19% quarter-over quarter and 15%
year-over-year, reflecting significant curtailments across the
Company's UK mills in response to reduced customer demand.
Norbord's European mills produced at 70% of stated capacity in the
second quarter of 2020, compared to 93% in the first quarter and
91% in the second quarter of 2019.
The Company generated net Margin Improvement Program (MIP) gains
of $34 million year-to-date due to
improved mill productivity and lower controllable manufacturing and
overhead costs.
Investment in property, plant and equipment and intangible
assets was $14 million in the second
quarter ($39 million year-to-date),
including $2 million ($39 million project-to-date) in the Inverness phase 2 project. There was no
investment ($53 million
project-to-date) in the Chambord
mill rebuild project during the quarter as Quebec construction sites were declared
non-essential during COVID-19. The Company has not yet made a
restart decision for the Chambord
mill, and will only do so when it is sufficiently clear that
customers require the production from this mill.
At quarter-end, the Company had unutilized liquidity of
$378 million, comprising $20 million in cash and cash equivalents,
$291 million in revolving bank lines
and $67 million in available drawings
under its accounts receivable securitization program. Operating
working capital was $152 million,
seasonally lower compared to $197
million at the prior quarter-end and modestly lower than
$162 million at the same quarter-end
last year. The Company's tangible net worth was $1,001 million and net debt to capitalization on
a book basis was 40%, with both values well within bank
covenants.
Dividend
The Board of Directors declared a quarterly variable dividend of
C $0.30 per common share, payable on
September 21, 2020 to shareholders of
record on September 1, 2020.
Consistent with Norbord's variable dividend policy and historically
balanced approach to capital allocation, the dividend is being
increased from the prior quarter's level of C $0.05 per common share to reflect the Company's
strong financial results and improving end-market demand. The
Company continues to focus on balance sheet flexibility given the
economic uncertainty from the ongoing COVID-19 pandemic. Any
dividends reinvested on September 22,
2020 under the Company's Dividend Reinvestment Plan will be
used by the transfer agent to purchase common shares on the open
market.
Norbord's dividends are declared in Canadian dollars, however
shareholders may opt to receive their dividends in the US dollar
equivalent. Details regarding this option are available on
Norbord's website at
https://www.norbord.com/investors/shareholder-information/dividends.
Norbord's variable dividend policy targets the payment to
shareholders of a portion of free cash flow based upon the
Company's financial position, results of operations, cash flow,
capital requirements and restrictions under the Company's revolving
bank lines, as well as the market outlook for the Company's
principal products and broader market and economic conditions,
among other factors. The Board retains the discretion to amend the
Company's dividend policy in any manner and at any time as it may
deem necessary or appropriate in the future. For these reasons, as
well as others, the Board in its sole discretion can decide to
increase, maintain, decrease, suspend or discontinue the payment of
cash dividends in the future.
Additional Information
Norbord's Q2 2020 news release, management's discussion and
analysis, consolidated unaudited financial statements and notes to
the financial statements have been filed on SEDAR (www.sedar.com),
EDGAR (www.sec.gov) and are available in the investor section of
the Company's website at www.norbord.com. Shareholders may receive
a hard copy of Norbord's audited annual financial statements free
of charge upon request. The Company has also made available on its
website presentation materials containing certain historical and
forward-looking information relating to Norbord, including
materials that contain additional information about the Company's
financial results. Shareholders are encouraged to read this
material.
Conference Call
Norbord will hold a conference call for analysts and
institutional investors on Wednesday, August
5, 2020 at 11:00 a.m. ET. The
call will be broadcast live over the internet via www.norbord.com
and www.newswire.ca. An accompanying presentation will be available
in the "Investors/Conference Call" section of the Norbord website
prior to the start of the call. A replay number will be available
approximately one hour after completion of the call and will be
accessible until September 4, 2020 by
dialing 1-888-203-1112 or 647-436-0148 (passcode 1503897 and pin
7824). Audio playback and a written transcript will be available on
the Norbord website.
Norbord Profile
Norbod Inc. is a leading global manufacturer of wood-based
panels and the world's largest producer of oriented strand board
(OSB). In addition to OSB, Norbord manufactures particleboard,
medium density fibreboard and related value-added products. Norbord
has assets of approximately $1.8
billion and employs approximately 2,400 people at 17 plant
locations in the United States,
Canada and Europe. Norbord is a publicly traded company
listed on the Toronto Stock Exchange and New York Stock Exchange
under the symbol "OSB".
This news release contains forward-looking statements, as
defined by applicable securities legislation, including statements
related to our strategy, projects, plans, future financial or
operating performance and other statements that express
management's expectations or estimates of future performance.
Often, but not always, forward-looking statements can be identified
by the use of words such as "set up," "on track," "expect,"
"estimate," "forecast," "target," "outlook," "schedule,"
"represent," "continue," "intend," "should," "would," "could,"
"will," "can," "might," "may," and other expressions which are
predictions of or indicate future events, trends or prospects and
which do not relate to historical matters identify forward-looking
statements. Forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Norbord to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements.
Although Norbord believes it has a reasonable basis for
making these forward-looking statements, readers are cautioned not
to place undue reliance on such forward-looking information. By its
nature, forward-looking information involves numerous assumptions,
inherent risks and uncertainties, both general and specific, which
contribute to the possibility that the predictions, forecasts and
other forward-looking statements will not occur. These factors
include, but are not limited to: (1) developments related to
COVID-19 or any other plague, epidemic, pandemic, outbreak of
infectious disease or any other public health crisis, including
health and safety measures instituted to protect the Company's
employees, government-imposed restrictions or other restrictions
that may apply to the Company's employees and/or operations
(including quarantine), the impact on customer demand, supply and
distribution and other factors; (2) assumptions in connection with
the economic and financial conditions in the US, Europe, Canada and globally; (3) risks inherent to
product concentration and cyclicality; (4) effects of competition
and product pricing pressures; (5) risks inherent to customer
dependence; (6) effects of variations in the price and availability
of manufacturing inputs, including continued access to fibre
resources at competitive prices and the impact of third-party
certification standards; (7) availability of transportation
services, including truck and rail services, and port facilities;
(8) various events that could disrupt operations, including
natural, man-made or catastrophic events and ongoing relations with
employees; (9) impact of changes to, or non-compliance with,
environmental or other regulations; (10) government restrictions,
standards or regulations intended to reduce greenhouse gas
emissions; (11) impact of weather and climate change on Norbord's
operations or the operations or demand of its suppliers and
customers; (12) impact of any product liability claims in excess of
insurance coverage; (13) risks inherent to a capital intensive
industry; (14) impact of future outcomes of tax exposures; (15)
potential future changes in tax laws, including tax rates; (16)
effects of currency exposures and exchange rate fluctuations; (17)
future operating costs; (18) availability of financing, bank lines,
securitization programs and/or other means of liquidity; (19)
impact of future cross-border trade rulings or agreements; (20)
implementation of important strategic initiatives and
identification, completion and integration of acquisitions; (21)
ability to implement new or upgraded information technology
infrastructure; (22) impact of information technology service
disruptions or failures; and (23) changes in government policy and
regulation.
The above list of important factors affecting forward-looking
information is not exhaustive. Additional factors are noted
elsewhere, and reference should be made to the other risks
discussed in filings with Canadian and US securities regulatory
authorities. Except as required by applicable law, Norbord does not
undertake to update any forward-looking statements, whether written
or oral, that may be made from time to time by, or on behalf of,
the Company, whether as a result of new information, future events
or otherwise, or to publicly update or revise the above list of
factors affecting this information. See the "Forward-Looking
Statements" section in the February 4,
2020 Annual Information Form and the cautionary statement
contained in the "Forward-Looking Statements" section
of the 2019 Management's Discussion and Analysis dated
February 4, 2020 and Q2 2020
Management's Discussion and Analysis dated August 4, 2020.
In evaluating the Company's business, management uses
non-International Financial Reporting Standards (IFRS) financial
measures which, in management's view, are important supplemental
measures of the Company's performance and believes that they are
frequently used by investors, securities analysts and other
interested persons in the evaluation of Norbord and other similar
companies. In this news release, the following non-IFRS financial
measures have been used: Adjusted EBITDA, Adjusted earnings (loss),
Adjusted earnings (loss) per share, operating working capital,
tangible net worth, and net debt to capitalization, book basis.
Norbord defines Adjusted EBITDA as earnings (loss) determined in
accordance with IFRS before finance costs, interest income, income
taxes, depreciation, amortization and non-recurring or other items;
Adjusted earnings (loss) as earnings (loss) determined in
accordance with IFRS before non-recurring or other items and using
a normalized income tax rate; Adjusted earnings (loss) per share is
Adjusted earnings (loss) divided by the weighted average number of
common shares outstanding (on a basic or diluted basis, as
specified); operating working capital as accounts receivable plus
inventory and prepaids less accounts payable and accrued
liabilities; tangible net worth as shareholders' equity including
certain adjustments; net debt to capitalization, book basis as net
debt for financial covenant purposes divided by the sum of net debt
for financial covenant purposes and tangible net worth; net debt
for financial covenant purposes as net debt excluding other
long-term debt and including other liabilities classified as debt
for financial covenant purposes, letters of credit and guarantees
outstanding, and any bank advances; and net debt as the principal
value of long-term debt, including the current portion, other
long-term debt and bank advances, if any, less cash and cash
equivalents. Non-IFRS financial measures do not have any
standardized meaning prescribed by IFRS and are therefore unlikely
to be comparable to similar measures presented by other companies
that may have different financing and capital structures, and/or
tax rates. See "Non-IFRS Financial Measures" in Norbord's 2019
Management's Discussion and Analysis dated February 4, 2020 and Q2 2020 Management's
Discussion and Analysis dated August 4,
2020 for a quantitative reconciliation of these non-IFRS
financial measures to the most directly comparable IFRS
measure.
Interim Consolidated Balance Sheets
(Unaudited)
(US $
millions)
|
|
Jul 4,
2020
|
|
Dec 31,
2019
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
20
|
|
$
|
20
|
Accounts
receivable
|
|
137
|
|
136
|
Taxes
receivable
|
|
12
|
|
63
|
Inventory
|
|
208
|
|
230
|
Prepaids
|
|
8
|
|
13
|
|
|
385
|
|
462
|
Non-current
assets
|
|
|
|
|
Property, plant and
equipment
|
|
1,367
|
|
1,427
|
Intangible
assets
|
|
20
|
|
21
|
Deferred income tax
assets
|
|
1
|
|
2
|
Other
assets
|
|
12
|
|
9
|
|
|
1,400
|
|
1,459
|
|
|
$
|
1,785
|
|
$
|
1,921
|
Liabilities and
shareholders' equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
201
|
|
$
|
259
|
Taxes
payable
|
|
1
|
|
1
|
|
|
202
|
|
260
|
Non-current
liabilities
|
|
|
|
|
Long-term
debt
|
|
657
|
|
657
|
Other long-term
debt
|
|
—
|
|
68
|
Other
liabilities
|
|
41
|
|
40
|
Deferred income tax
liabilities
|
|
199
|
|
192
|
|
|
897
|
|
957
|
Shareholders'
equity
|
|
686
|
|
704
|
|
|
$
|
1,785
|
|
$
|
1,921
|
Interim Consolidated Statements of Earnings (Loss)
(Unaudited)
Periods ended Jul 4
and Jul 6 (US $ millions, except per share information)
|
|
Q2
2020
|
|
Q2 2019
|
|
6 mos
2020
|
|
6 mos 2019
|
Sales
|
|
$
|
421
|
|
$
|
447
|
|
$
|
888
|
|
$
|
923
|
Cost of
sales
|
|
(335)
|
|
(408)
|
|
(724)
|
|
(840)
|
General and
administrative expenses
|
|
(4)
|
|
(4)
|
|
(7)
|
|
(7)
|
Depreciation and
amortization
|
|
(32)
|
|
(34)
|
|
(67)
|
|
(69)
|
Loss on disposal of
assets
|
|
(3)
|
|
(1)
|
|
(3)
|
|
(1)
|
Impairment of
assets
|
|
(16)
|
|
—
|
|
(16)
|
|
—
|
Costs related to 100
Mile House indefinite curtailment
|
|
—
|
|
(2)
|
|
—
|
|
(2)
|
Operating income
(loss)
|
|
31
|
|
(2)
|
|
71
|
|
4
|
Non-operating
items:
|
|
|
|
|
|
|
|
|
Finance
costs
|
|
(10)
|
|
(12)
|
|
(22)
|
|
(23)
|
Interest
income
|
|
—
|
|
—
|
|
—
|
|
1
|
Costs on early
extinguishment of 2020 Notes
|
|
—
|
|
(10)
|
|
—
|
|
(10)
|
Earnings (loss)
before income tax
|
|
21
|
|
(24)
|
|
49
|
|
(28)
|
Income tax (expense)
recovery
|
|
(3)
|
|
10
|
|
(11)
|
|
15
|
Earnings
(loss)
|
|
$
|
18
|
|
$
|
(14)
|
|
$
|
38
|
|
$
|
(13)
|
Earnings (loss) per
common share
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.22
|
|
$
|
(0.17)
|
|
$
|
0.47
|
|
$
|
(0.16)
|
Interim Consolidated Statements of Comprehensive Income
(Loss)
(Unaudited)
Periods ended Jul 4
and Jul 6 (US $ millions)
|
|
Q2
2020
|
|
Q2 2019
|
|
6 mos
2020
|
|
6 mos 2019
|
Earnings
(loss)
|
|
$
|
18
|
|
$
|
(14)
|
|
$
|
38
|
|
$
|
(13)
|
Other comprehensive
income (loss), net of tax
|
|
|
|
|
|
|
|
|
Items that will not
be reclassified to earnings:
|
|
|
|
|
|
|
|
|
Actuarial loss on
post-employment obligations
|
|
(5)
|
|
(4)
|
|
(1)
|
|
(5)
|
Items that may be
reclassified subsequently to earnings:
|
|
|
|
|
|
|
|
|
Foreign currency
translation gain (loss) on foreign operations
|
|
10
|
|
(12)
|
|
(19)
|
|
(6)
|
Other comprehensive
income (loss), net of tax
|
|
5
|
|
(16)
|
|
(20)
|
|
(11)
|
Comprehensive income
(loss)
|
|
$
|
23
|
|
$
|
(30)
|
|
$
|
18
|
|
$
|
(24)
|
Interim Consolidated Statements of Changes in
Shareholders' Equity
(Unaudited)
Periods ended Jul 4
and Jul 6 (US $ millions)
|
|
Q2
2020
|
|
Q2 2019
|
|
6 mos
2020
|
|
6 mos 2019
|
Share
capital
|
|
|
|
|
|
|
|
|
Balance, beginning of
period
|
|
$
|
1,264
|
|
$
|
1,280
|
|
$
|
1,278
|
|
$
|
1,280
|
Issue of common
shares upon exercise of options
|
|
—
|
|
—
|
|
1
|
|
—
|
Common shares
repurchased and cancelled
|
|
—
|
|
—
|
|
(15)
|
|
(24)
|
Common shares
repurchased and cancelled under ASPP
|
|
—
|
|
—
|
|
—
|
|
24
|
Balance, end of
period
|
|
$
|
1,264
|
|
$
|
1,280
|
|
$
|
1,264
|
|
$
|
1,280
|
Merger
reserve
|
|
$
|
(96)
|
|
$
|
(96)
|
|
$
|
(96)
|
|
$
|
(96)
|
Contributed
surplus
|
|
$
|
4
|
|
$
|
4
|
|
$
|
4
|
|
$
|
4
|
Retained
deficit
|
|
|
|
|
|
|
|
|
Balance, beginning of
period
|
|
$
|
(298)
|
|
$
|
(193)
|
|
$
|
(299)
|
|
$
|
(168)
|
Earnings
(loss)
|
|
18
|
|
(14)
|
|
38
|
|
(13)
|
Common share
dividends
|
|
(3)
|
|
(24)
|
|
(15)
|
|
(49)
|
Common shares
repurchased and cancelled
|
|
—
|
|
—
|
|
(7)
|
|
(19)
|
Common shares
repurchased and cancelled under ASPP
|
|
—
|
|
—
|
|
—
|
|
18
|
Balance, end of
period(i)
|
|
$
|
(283)
|
|
$
|
(231)
|
|
$
|
(283)
|
|
$
|
(231)
|
Accumulated other
comprehensive loss
|
|
|
|
|
|
|
|
|
Balance, beginning of
period
|
|
$
|
(208)
|
|
$
|
(192)
|
|
$
|
(183)
|
|
$
|
(197)
|
Other comprehensive
income (loss)
|
|
5
|
|
(16)
|
|
(20)
|
|
(11)
|
Balance, end of
period
|
|
$
|
(203)
|
|
$
|
(208)
|
|
$
|
(203)
|
|
$
|
(208)
|
Shareholders'
equity
|
|
$
|
686
|
|
$
|
749
|
|
$
|
686
|
|
$
|
749
|
(i)
Retained deficit comprised of:
|
|
|
|
|
Deficit arising on
cashless exercise of warrants in 2013
|
|
$
|
(263)
|
|
$
|
(263)
|
All other retained
(deficit) earnings
|
|
(20)
|
|
32
|
|
|
$
|
(283)
|
|
$
|
(231)
|
Interim Consolidated Statements of Cash Flows
(Unaudited)
Periods ended Jul 4
and Jul 6 (US $ millions)
|
|
Q2
2020
|
|
Q2 2019
|
|
6 mos
2020
|
|
6 mos 2019
|
CASH PROVIDED BY
(USED FOR):
|
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
|
|
Earnings
(loss)
|
|
$
|
18
|
|
$
|
(14)
|
|
$
|
38
|
|
$
|
(13)
|
Items not affecting
cash:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
32
|
|
34
|
|
67
|
|
69
|
Deferred income
tax
|
|
(24)
|
|
11
|
|
7
|
|
32
|
Impairment of
assets
|
|
16
|
|
—
|
|
16
|
|
—
|
Costs related to 100
Mile House indefinite curtailment
|
|
—
|
|
2
|
|
—
|
|
2
|
Costs on early
extinguishment of 2020 Notes
|
|
—
|
|
10
|
|
—
|
|
10
|
Loss on disposal of
assets, net
|
|
3
|
|
1
|
|
3
|
|
1
|
Other
items
|
|
4
|
|
(11)
|
|
8
|
|
7
|
|
|
49
|
|
33
|
|
139
|
|
108
|
Net change in
non-cash operating working capital balances
|
|
46
|
|
39
|
|
(23)
|
|
(72)
|
Net change in taxes
receivable and taxes payable
|
|
30
|
|
(36)
|
|
48
|
|
(97)
|
|
|
125
|
|
36
|
|
164
|
|
(61)
|
Investing
activities
|
|
|
|
|
|
|
|
|
Investment in
property, plant and equipment
|
|
(15)
|
|
(37)
|
|
(44)
|
|
(77)
|
Investment in
intangible assets
|
|
(1)
|
|
(1)
|
|
(2)
|
|
(1)
|
|
|
(16)
|
|
(38)
|
|
(46)
|
|
(78)
|
Financing
activities
|
|
|
|
|
|
|
|
|
Accounts receivable
securitization (repayments) drawings
|
|
(95)
|
|
2
|
|
(68)
|
|
82
|
Revolving bank lines
repayments
|
|
(20)
|
|
—
|
|
—
|
|
—
|
Issuance of
debt
|
|
—
|
|
350
|
|
—
|
|
350
|
Common share
dividends paid
|
|
(3)
|
|
(24)
|
|
(15)
|
|
(49)
|
Debt issuance
costs
|
|
(1)
|
|
(4)
|
|
(1)
|
|
(4)
|
Issue of common
shares
|
|
—
|
|
—
|
|
1
|
|
—
|
Repurchase of common
shares
|
|
—
|
|
—
|
|
(22)
|
|
(43)
|
Repayment of lease
obligations
|
|
(3)
|
|
(3)
|
|
(6)
|
|
(6)
|
|
|
(122)
|
|
321
|
|
(111)
|
|
330
|
Foreign exchange
revaluation on cash and cash equivalents held
|
|
3
|
|
(6)
|
|
(7)
|
|
(4)
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
(Decrease) increase
during period
|
|
(10)
|
|
313
|
|
—
|
|
187
|
Balance, beginning of
period
|
|
30
|
|
2
|
|
20
|
|
128
|
Balance, end of
period
|
|
$
|
20
|
|
$
|
315
|
|
$
|
20
|
|
$
|
315
|
View original
content:http://www.prnewswire.com/news-releases/norbord-reports-second-quarter-2020-earnings-declares-quarterly-dividend-301106174.html
SOURCE Norbord Inc.